A new report from Daymon has suggested that retailers need to rejuvenate their private brand innovation strategies or risk falling behind the competition, in an increasingly complex, constantly-changing environment.
Daymon's study, Global Perspective On Private Brands – 2022 Private Brand Intelligence Report, says that there are three core reasons why retailers need to remain vigilant with their private brand innovation strategies – to build on increased consumer trial and trust; to establish differentiation; and to maximise brand and banner loyalty.
Increased Trial And Trust
Consumers are becoming 'brand-agnostic', Daymon's study claims, with some 89% of consumers in the US now trusting private brands just as much – or more – than national brands. With this in mind, shoppers are more likely to try additional products within a retailer's portfolio.
'However, as shoppers are constantly searching for new items to deliver on their expectations, retailers must continue innovating, with yesterday’s Private Brands unable to deliver to today’s shoppers,' Daymon's report says.
Differentiation is key in a competitive retail environment, and previous Daymon research has shown that competing retailers’ assortments overlap by as much as 98% – largely due to the high proportion of national brands on the shelves of each.
Private label offers an opportunity to maximise that differentiation; as Daymon puts it, 'The power of private brands rests in their ability to offer shoppers items that can only be purchased at their banner, with consumers returning for their unique and differentiated offerings.'
Another core reason why innovation is crucial for private brands today is in order to secure customer loyalty, beyond the product portfolio.
Research from Daymon has shown that a strong private brand offering creates banner-loyal customers; some 75% of loyal private brand shoppers in the US have a 'preferred' store that they shop at, while 48% of UK consumers agree that private brand range is important when selecting where to shop.
According to Daymon, private brands 'have the power to make or break banner loyalty', and will have a lasting effect on how retailers reshape their innovation strategies to determine their future success.
Exceeding Shopper Expectations
"When it comes to separating yourself from the competition, Private Brands stand as the key to providing truly differentiated offerings with a customised shopping experience," commented Michael Taylor, President, Daymon. "Shoppers appreciate the benefits of Private Brands and are returning time and time again to retailers that provide for their unique needs and preferences, with increased trial furthering brand and banner loyalty.
"With consumer loyalty directly dependent on who can provide them what they want, when they need it, and at the right value, Private Brands are in the perfect position to come out on top. But as the evolution of the shopping experience shows no signs of slowing down, Private Brands must update strategies to meet consumer expectations for the long term or risk losing out to the competition."
To read the full report, click here.